Kolkata, March 3 (IANS): Senior BJP leader and former union finance minister Yashwant Sinha said here on Tuesday that the Fiscal Responsibility and Budget Management Act, 2003 (FRBM Act) should not be amalgamated with the Finance Bill 2015.

If needed, the act should be amended to keep pace with time, he added.

"The FRBM Act was instrumental in bringing the fiscal deficit under control and reduce revenue expenditure which helped India boom in 2007-08," said Sinha, a former finance minister, at an event organised by the Merchant Chamber of Commerce and Industry here.

He said the Atal Bihari Vajpayee-led government aimed to reduce the fiscal deficit to three percent of the GDP (the nation's gross produce of goods and services) and do away with the unyielding revenue deficit altogether.

"With these goals in mind the FRBM Act was adopted and by 2007-08 our fiscal deficit fell to 2.5 percent even though the revenue deficit fell to 1.1 percent."

Sinha said the economic boom of 2007-08 owes its origin to the FRBM Act which the NDA government adopted in 2003.

The financial act was adopted in 2003 to bring in financial disciple in the nation's macro-economic scenario by formulating a balanced budget.

The deadlines it aimed at were suspended in 2009. However, in 2011 the Economic Advisory Council advised the centre to reconsider the provisions of the act.

Sinha blamed the previous Congress-led United Progressive Alliance (UPA) government's policies for the inflationary trends in India and the mounting fiscal deficit.

"In 2009, the fiscal deficit was 2.7 percent which mounted to six percent, then 6.5 percent and then to 5.8 percent with the revenue deficit at four percent (during the UPA I and II regime)," he said.

Sinha, also a former external affairs minister, said by 2017 even if fiscal deficit can be reduced to two percent, the revenue deficit is also pegged at two percent which will be detrimental for the country.